MTN to sell minority stake in $5.2bn fintech business to Mastercard
3 min read
MTN to sell minority stake in $5.2bn fintech business to Mastercard
By Admin
Pan African Telecommunications Group, MTN, said it has signed a memorandum of understanding with Mastercard to sell a minority stake in its fintech business valued at $5.2 billion.
The company disclosed this in a statement on its half-year financial performance released on Monday.
According to the Group, the signing of the investment agreements is to take place soon as due diligence is finalized.
MTN further disclosed that the fintech business delivered on its rapid expansion plans in the first half of this year.
It added that the volume of transactions increased by 37% to 8.3 billion and these transactions were executed by 61 million active MoMo customers.
Commercial agreement
While noting that the Group signed a commercial agreement with Mastercard to further drive the growth of the fintech business, MTN said:
“Following the bespoke process to identify and potentially introduce strategic minority investors into MTN Group Fintech, we executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services.
“MTN and Mastercard also signed a memorandum of understanding which provides for a minority investment by Mastercard into Group Fintech based on a total enterprise valuation of about US$5.2 billion for the business on a cash and debt-free basis.
“The signing of the definitive investment agreements is expected to occur in the very near term as we approach the finalization of customary due diligence.
“The closing of the investment will be subject to customary closing conditions.”
Half year performance
Providing insights on the Group’s financial performance for the half year 2023, MTN Group’s CEO Ralph Mupita said the Group delivered a resilient performance and made good strategic progress against a tough macro backdrop.
“In South Africa, we were very encouraged by the improved network availability on the back of our power-resilience investment, resulting in a stronger Q2 23 performance than Q1 23,” he said.
“By end-June, MTN South Africa’s network availability was more than 90% despite severe electricity shortages across the country.
“In Nigeria, we delivered a very strong operational result, having navigated the cash shortages in Q1 23 and increased inflation,” Mupita said.
“The policy changes implemented in Nigeria in Q2 23 have short-term negative impacts, but we see these as being very constructive for the investment climate in the medium to longer term,” Mupita said.
According to him, MTN Group’s service revenue grew 15% to almost R108 billion in constant-currency terms.
This was driven by increases in revenue from data services of 24% and from fintech services of 22%. Revenue from voice services increased by 6% in the period.
Read Also:Manchester United set to delay Mason Greenwood reintegration decision until September international break
At the end of June 2023, the Group had 292 million subscribers.
This subscriber base 4% higher than the same period last year benefited from lower data rates and improved access to broadband services.
Source: Nairametrics
About The Author
